Finance Minister Nirmala Sitharaman on Friday said the inclusion of solar stage batteries and charging infrastructure will boost production of electric vehicles and their faster adoption by customers in the country.
"Under Phase-II of the FAME Scheme (Faster Adoption and Manufacturing of (Hybrid & ) Electric Vehicles Scheme), only advanced battery and registered e-vehicles will be incentivized, with greater emphasis on providing affordable and environment-friendly public transportation options for the common man," she said while presenting the Union Budget.
The main objective of the scheme is to encourage faster adoption of electric vehicles through upfront incentive on the purchase of such vehicles and also by establishing the necessary charging infrastructure for the same, Sitharaman added.
The minister informed that Phase II of FAME has an outlay of Rs 10,000 crore for a period of 3 years and has commenced from April 1.
Lowering GST on electric vehicles and additional income tax deduction on loans for purchase will also boost their sale in the country, the minister said.
"The Government has already moved GST council to lower the GST rate on electric vehicles from 12% to 5%," said Sitharaman.
Also to make electric vehicles affordable to consumers, the Union Budget says the government will provide additional income tax deduction of Rs 1.5 lakh on the interest paid on loans taken to purchase electric vehicles.
This amounts to a benefit of around Rs 2.5 lakh over the loan period to the taxpayers who take loans to purchase electric vehicles.
To further incentivise e-mobility, the government is also planning to exempt certain parts of electric vehicles from customs duty.
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